Strategy and financial targets 2016

Henkel has had four very successful years. The financial targets that we set in 2008 for 2012 formed the basis for our success, and we rigorously pursued them with the implementation of our strategic priorities, even in difficult business conditions. We achieved or even surpassed our ambitious financial targets for 2012.


Achievement of financial targets 2008–2012
 

Annual organic sales growth (average)1

3–5 %

Adjusted2 return on sales (EBIT) 2012

14 %

Annual growth in adjusted earnings per

preferred share (average)3

>10 %
1
Arithmetic mean 2009–2012.
2
After adjusting for one-time charges/gains and restructuring charges.
3
Compound annual growth rate (CAGR) 2008 through 2012.

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Our new strategy through 2016, which we presented back in November 2012, follows on the successful implementation of our strategic priorities and financial targets for 2012. As such, it represents a logical continuation and advancement of the progress achieved over the past four years.

The strategy is based on thorough analysis of the long-term megatrends that are relevant for Henkel, and of Henkel’s individual business sectors. We examined the existing portfolio of our three business sectors to see whether they were suitably positioned to allow continued successful and profitable growth in their respective environments. As a result, we see considerable potential, both for further organic growth and for enhanced profitability, in all three business sectors.

Three megatrends played a key role in the definition of our new financial targets:

  1. We expect progressive consolidation among our competitors, customers and suppliers. Size will become an increasingly important factor for our ability to compete over the long term As such, increasing our sales is essential to allow us to continue to operate successfully in our markets in the future.

  2. The shift of economic growth to emerging markets will continue. This will require Henkel to steadily expand its position in these important markets and further increase our sales in emerging markets.

  3. The speed and volatilityMeasure of fluctuation and variability in the prices quoted for securities, in interest rates and in foreign exchange rates.
    of our markets will remain high and may even increase further. This requires processes and structures that are more flexible and more efficient to enable us to respond to changes faster than our competitors. We therefore want to continuously improve our operational excellenceA comprehensive program to structure and optimize all Henkel’s business processes based on customer needs, quality and efficiency.
    and deliver outstanding financial performance.

That is why

  • absolute sales of the corporation as a whole,
  • sales in emerging markets, and
  • growth in earnings per preferred share (EPS)

form the cornerstones of our financial targets through 2016.